Sarothi - The Start Up Assam

What is Sarothi - The Start Up Assam?

Sarothi - The Start Up Assam is a start-up credit scheme of the Industries, Commerce and Public Enterprises Department, Government of Assam. According to the scheme page on the Assam state portal, the scheme's stated objective is to provide financial assistance in the form of a loan with interest subvention through a designated bank, covering the whole of Assam.

Sarothi came out of the Chief Minister's Start-up Fund of the same name, set up with an initial corpus of Rs 10 crore in the financial year 2016-17. The problem the scheme was written to solve is a familiar one in Assam's districts: a first-generation entrepreneur with a workable idea and no collateral history cannot get a bank to look at a small project, and the interest cost on the small loan they do get eats the thin margins of a new unit.

Sarothi answers both halves of that. The District Industries and Commerce Centre screens and forwards the proposal so the bank is not evaluating a walk-in, and the state pays part of the interest so the effective cost of the loan falls.

Key features

• Maximum loan of Rs 10 lakh per beneficiary.
• 5 per cent per year interest subvention borne by the Government of Assam.
• Promoter's own equity or margin fixed at 15 per cent of project cost.
• Routed through the District Industries and Commerce Centre (DICC) and a District Level Committee, then to the designated bank branch.
• No processing or documentation fees charged by the bank to the beneficiary.

How much assistance does Sarothi provide?

Sarothi is structured as a bank loan with a state-funded interest concession, not as a cash grant. The three numbers that matter are these.

The interest subvention is not handed to the entrepreneur. The bank works out the subvention amount and adjusts it in the loan account, and the scheme document describes this as being debited quarterly after each quarter is completed. So the borrower pays the normal interest rate on paper, and the effective rate falls by five percentage points once the subvention is applied.

A worked example makes the size of the benefit clear. On a Rs 8 lakh loan, a 5 per cent per year subvention is worth about Rs 40,000 in the first year, before the principal starts coming down. Over the life of a small project loan that is a meaningful share of what an early-stage unit would otherwise spend on finance.

The subvention runs for the loan term as agreed at sanction. It is tied to the account behaving normally. An account that turns into a non-performing asset stops drawing the concession.

Who is eligible for Sarothi?

You can be considered if:

• You are setting up an innovative start-up industrial activity or a new micro, small or medium enterprise in Assam.
• You are a new individual applicant, the scheme is written around first-generation entrepreneurs rather than established units seeking expansion finance.
• You can put in 15 per cent of the project cost as your own equity or margin.
• You are not a defaulter of any bank or financial institution.

Applicants who have completed skill development training are given priority in the selection, which is worth knowing before you assemble your file: a trade or skill certificate that you already hold is worth attaching.

You cannot apply if:

• You are an existing defaulter at any bank or financial institution.
• Your loan account has become or becomes a non-performing asset, in which case the interest subvention stops.
• You are seeking a personal loan rather than finance for an enterprise — Sarothi funds a project, and the application is built around a project report.
• Your project needs more than Rs 10 lakh and you have no plan for the balance, since the scheme ceiling is fixed.

What documents are required for Sarothi?

The project report is the document the District Level Committee actually reads. A weak one-page note describing an intention is the most common reason a proposal stalls; a report that sets out the cost break-up, the promoter's 15 per cent contribution, expected monthly output and how the loan will be repaid moves much faster.

How to apply for Sarothi

1. Prepare a project report for the enterprise you want to set up, showing the total project cost, your own 15 per cent contribution, and the loan you need within the Rs 10 lakh ceiling.
2. Visit the District Industries and Commerce Centre (DICC) of your district and collect the prescribed Sarothi application form from the office of the General Manager.
3. Submit the completed form to the General Manager, DICC, along with the project report, Aadhaar, PAN, residence proof and any skill training certificate you hold.
4. Wait for DICC scrutiny. The DICC checks the proposal for completeness and eligibility and places it before the District Level Committee.
5. Attend the District Level Committee stage if you are called. This is the body that recommends proposals for sanction.
6. Complete the bank formalities at the branch to which your recommended proposal is forwarded, and note that the bank is not to charge you processing or documentation fees.
7. Bring in your 15 per cent margin and start drawing the loan, after which the interest subvention is applied by the bank in the loan account.

The scheme's implementing office is the Chief Administrative Office, Single Window Agency, Udyog Bhawan, Maniram Dewan Road, Bamunimaidam, Guwahati 781021, which is the address to use for scheme-level correspondence rather than for an individual application.

How do you check the status of a Sarothi application?

Sarothi is an offline, file-based process, so the status lives with the office holding your file at that moment.

1. At the DICC, ask the dealing assistant under your application number whether the file is still under scrutiny or has gone to the District Level Committee.
2. After the committee meets, ask the DICC whether your proposal was recommended and to which bank branch it was forwarded.
3. At the bank branch, follow up on the sanction. Applicants often lose weeks here because they assume a recommendation is a sanction; the bank still runs its own appraisal.

Why Sarothi proposals get rejected

• Default history with a bank or financial institution, which is a disqualification written into the scheme.
• A thin project report that does not establish viability or repayment.
• No arrangement for the 15 per cent margin, which the bank checks before disbursement.
• Project cost far above the Rs 10 lakh ceiling with no other source of funds identified.
• Incomplete documents, particularly missing residence proof or PAN.
• An existing running unit applying as if it were a new one, when the scheme is aimed at new enterprises and first-generation entrepreneurs.

Where do you raise a grievance about Sarothi?

Start with the General Manager, District Industries and Commerce Centre of your district. This office both receives the application and services the District Level Committee, so it is the correct first stop for a delay or a disputed rejection. If the issue is with the bank rather than the department, raise it with the branch manager and then the bank's controlling office; a demand for processing fees, for instance, runs against the scheme's own terms.

Departmental escalation goes to the Industries, Commerce and Public Enterprises Department, which publishes the scheme document on industries.assam.gov.in. Sarothi has no application fee, and no agent has any role in it.